The demographic crisis in Croatia isn't shifting, and nor are its extremely concerning effects. As we reported recently, half a million workers have now left Croatia's borders and are making their money, and indeed spending their money - elsewhere. Is total quota abolition the only measure left?

The Croatian Chamber of Commerce (HGK), which many criticise heavily for being part of this enormous demographic problem, has claimed that without foreign workers, Croatia will struggle enormously in the forthcoming period. While EEA nationals (with the current exception of Austrian citizens) and all foreign citizens who hold permanent residence status in Croatia are free to work on the same basis as Croatian nationals and do not require any sort of work permit, the barriers are high and the red tape usually endless for third country nationals.

Back in 2019, the Croatian Government issued a decision on quota abolition for foreign (third country) nationals, marking a truly monumental step forward in addressing the huge issues facing Croatia's economy and the ability of Croatian employers to actually find qualified staff. While many deem quota abolition to have been a bad move, in the sense that more effort should have been put into retaining a domestic labour force by raising wages, lowering taxes and removing senseless, draconian rules for would-be entrepreneurs, it now seems apparent that the Croatian Government at the very least realises the velocity of the issue at hand.

Consideration is now being given to complete and utter quota abolition, which is good news for third country nationals seeking work in Croatia, or is it? With MUP being typically painfully slow and often totally incompetent when it comes to dealing with residence and work procedures for all foreign nationals, including those from the EEA who have every right to live and work in Croatia, many Croatian employers are finding foreign labour too late, with MUP only approving all of their papers after the tourist season has passed and the majority are no longer even required.

Croatia's demographic issues therefore go far beyond the rather simple idea of raising wages and lowering taxes, they are deeply embedded in the Croatian psyche because the state's outdated systems simply don't work and are actually on nobody's side. In such a toxic, stagnant situation, it's hardly surprising that rainy Ireland and the UK look so appealing.

As Poslovni Dnevnik/Darko Bicak writes on the 16th of January, 2020, an increasing shortage of workers in Croatia is now becoming visible on a daily basis, and an official analysis of the Croatian Chamber of Commerce (HGK) has been published recently, revealing that over the past ten years, Croatia has lost half a million workers - it is now time to abolish all quotas and drop the barriers according to some.

In an urgent parliamentary procedure, the government has proposed amendments to the Student Affairs Act, which changes the definition of "student", ie, it makes it possible for student jobs in Croatia to be performed by students who are foreign nationals and who are not nationals of European Union member states, as well as students who are under international protection, and even exchange students undertaking their studies at colleges in Croatia.

Make sure to follow our dedicated politics page for much more on quota abolition.

I recently wrote an article on work permits in Croatia, and delved into what being inside and being outside of the annual quota means. Click here for that, and then read this article which discusses the changes to the Law on Foreigners to see how the changes may apply to you should you be attempting to get a work permit as a third country national in Croatia.

The information provided here should allow you to know what to do (should you need to do anything at all) in order to act accordingly depending on your personal situation.

As Poslovni Dnevnik writes on the 6th of November, 2019, the annual quotas for the import of foreign workers set by the Croatian Government will soon be condemned to the history books. In future, employers will employ foreign workers on the basis of a labour market test conducted by the Croatian Employment Service, and in some professions, the import of foreign workers will be fully liberalised, again at the discretion of the CES Governing Council.

The move stems from the draft of the new Law on Foreigners, which has been in public consultation since last week.

Under the new law, an employer from Croatia seeking to hire a foreign (non-EU) worker will have to contact the CES/HZZ regional office to verify whether or not there are any unemployed persons in their records who meet the employer’s requirements.

If there are any, the CES will mediate employment, otherwise, it will issue an opinion on the basis of which MUP (Ministry of the Interior) will issue work permits for foreigners. Once again, this refers to third country nationals, not EU citizens, who can work freely just like Croatian citizens, without the need for any type of permit.

However, these tests will not be carried out in the case of seasonal agricultural workers, and there will be no need for the test in certain other professions either, depending on the decisions of the Governing Council.

The draft law also specifies that these tests will also be overlooked for occupations that are lacking on the local and regional labour market and cannot be ''stoked'' by migration into the country, the implementation of strategic and investment projects, and "other circumstances relevant to economic growth and sustainable development".

The law also provided for exceptions, that is, there will be certain employers who will not be allowed to hire foreign/non EU workers. In such cases, third country nationals would not be allowed to be imported by employers who are subject to proceedings for the non-payment of salaries, those who have companies in liquidation or who have had their accounts blocked for more than thirty days, those who do not pay taxes, and those who have no actual contracted employees. It is also explicitly stipulated that the share of third country nationals among the total number of employees under one employer should not exceed one third, according to a report from Vecernji list.

Since time for the adaptation to this new model is required, above all by the CES, it has been circulating (albeit unofficially for now) that a temporary quota for the employment of non-EU workers will be granted during the first months of next year.

HUP has warned that with the full opening of the Austrian labour market, which has remained limited to Croatian workers owing to a right provided to member states of the EU, it will be even harder for employers to retain domestic workers, as well as foreign seasonal workers next year, which is why they consider the abolition of quotas entirely to be a very reasonable measure.

HUP's Davor Majetić emphasised that it is necessary to prepare a model of employment that will be more competitive than the countries in Croatia's immediate region, but also emphasised that such a model must be functional, which requires quality preparation of the system.

''We therefore support the government's acceptance of our initiative to introduce the Law on Foreigners through a regular procedure in order to implement the process of adjusting the system and stakeholders in a timely manner,'' Majetić said. He warned, however, that the checking of various employers to allow them to import foreign workers could bring with it even more, new administrative burdens, since the employer has so far only required proof of company registration.

Make sure to follow our dedicated politics page for much more.